Not PC

. . . promoting capitalist acts between consenting adults.

Friday, May 04, 2012

Friday Morning Ramble: The ‘Week of Sideshows” Edition

Politics this week has been nothing but sideshows. The biggest of all being the sideshow about John Banks—as if discussing a man’s hotel bill is the most important thing a country’s politicians could be doing. So, here’s a few things on which they might have focussed instead.

“The single biggest challenge facing New Zealand universities is that we operate with the lowest expenditure per student of any system in the developed world.” Options - O F F S E T T I N G B E H A V I O U R

Guess what. Most of the so called “failed” polices of the 80s not only succeeded but are still serving us well. Eighties reforms recalled – L I N D S A Y M I T C H E L L

“As part of our wider commitment to improving access to political information,” the Green Party boast they are now the first political party in the world to translate their policies into sign language. Apparently they don’t think deaf people can read. Green policies translated into NZ Sign Language – Mojo Mathers, F R O G B L O G

“Robert Spencer performs a super detective service for the West in ‘Did Muhammad Exist? An Inquiry into Islam’s Obscure Origins.’ He examines virtually every aspect of the composition and history of Islam and its purported founder, Mohammad." Conclusion: “Islam has swindled its faithful, its communicants, its followers, its believers. All the possible evidence points to the fact that Islam's substance and veracity comprise a theological and historical fraud.” Islam: A Will-o'-the-Wisp of Political Faith - Edward Cline, R U L E O F R E A S O N

Talk about lying with statistics! “The bottom line is that figuring out who pays how much in taxes is really, really hard. We should be skeptical whenever we hear pronouncements about how much this or that group is paying.” How to lie with statistics – John Cochrane, T H E G R U M P Y E C O N O M I S T

I was getting myself frothed up about the recent idea that "speculators" are behind the recent gas price increase. Have we learned nothing in the centuries of witch hunts for "speculators" "middlemen" and "money changers"? Speculation and gas prices - John Cochrane, T H E G R U M P Y E C O N O M I S T

“We know that: windfarms ruin the ocean view of Cape Cod homes; are shredding birds to smithereens like carrots in a Cuisinart; and are too intermittent and unreliable as a stand-alone energy source so need back-up by awful fossil fuel sources. “But do they also cause global warming?” Just Because Windmills Don’t Cause Global Warming Doesn’t Mean They Don’t Suck- B A S T I A T I N S T I T U T E

And here’s another, a top official at the American environmental bureaucracy the EPA once described its philosophy of regulating oil and gas producers this way: “It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean. They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw, and they’d crucify them. And then, you know, that town was really easy to manage for the next few years.” Top EPA official resigns after 'crucify' comment - F O X N E W S

And one more: “We know who the active [climate] denialists are—not the people who buy the lies, mind you, but the people who create the lies. Let’s start keeping track of them now, and when the famines come, let’s make them pay. Let’s let their houses burn. Let’s swap their safe land for submerged islands. Let’s force them to bear the cost of rising food prices.” I guess that’s better than the wishing death on all of humanity, which is a recurring theme among the greens. Climate Alarmist Calls For Burning Down Skeptics’ Homes- I N F O W A R S

Environmentalism and multi-culturalism are so prevalent in preschools today! Proper or improper? Political agenda at preschools – Kate Yoak, P A R E N T I N G I S . . .

“May Day is the day of the year that socialists celebrate that they work. Which is why they want to get the day off.” - Oliver Cooper

Arseholes worry about privatisation by the back door? How about excluding a not inconsiderable section of the population from routine surgery on the premise that—for currently fashionable reasons—they should be denied benefit from their taxes? They worry about privatisation by the back door? - M I N D T O M A T T E R

Justice? “After years of denying entry to Africans and with their economy now suffering, many Portuguese are trying to immigrate to Africa, only Africa isn't so eager to take them.” Who Will Take Americans? – Kelly Valenzuela, M O T H E R O F E X I L E S

Did you know the only car in the world so fuel efficient it can be driven across the US with only one stop for fuel cannot legally be sold there? It makes you contemplate what other technological wonders never see the light of day because of bureaucratic bossiness. The Case of the Missing Low-Mileage Car – Jeffrey Tucker, L A I S S E Z F A I R E T O D A Y

For the last year or so, Yaron Brook from the Ayn Rand Institute has been traveling around the States debating David Callahan, a senior fellow at Demos. The debates have focused on the fundamental issues underlying politics and economics: individualism and collectivism, capitalism and government intervention, democracy and limited government, and so on. Here’s the videos from our latest event, which took place in Chicago. Yaron Debates: Is Government the Problem Or The Solution? - L A I S S E Z F A I R E

Try not to be intimidated by what the supposed experts say; rather, think about the following sentence using logic and critical intelligence: “Cutbacks in government spending… will eat into growth.” This statement of seeming ironclad truth was pushed in an editorial in The New York Times… In fact, the opposite is true. If Government Spends Less, Are We Sunk? – Jeffrey Tucker, L A I S S E Z F A I R E T O D A Y

Credit is not…a magic piece of paper that reverses cause and effect, and transforms consumption into a source of production. - Ayn Rand

If you’re thinking the world is “out of recession,” think again. We’re like “the man who jumps off a 25-story building and as he's hurtling by the sixth floor he says 'don't worry, nothing has happened yet'.” Zuckerman To CNBC: "The Recession Never Ended" - Z ER O H E D G E

“Comparing wages across countries can be difficult, but one economist has come up with a way to track people doing identical jobs to make an identical product all across the world: McDonald’s employees.” Number of the Week: Using Big Macs to Compare Wages – R E A L T I M E E C O N O M I C S

There are many problems with it, but since 1995 the Heritage Foundation, a conservative think tank in Washington, D.C., has put together the Index of Economic Freedom to “track the march of economic freedom around the world.” Editor in Chief Matt Welch sat down with economist Jim Roberts, who co-authored the 2012 edition of the survey. They discussed reasons for optimism about China, reasons to worry about the United States, and the general state of economic liberty around the world. Ranking Economic Freedom in the U.S. and Abroad - R E A S O N

The days of Duckworth-Lewis ruining one-day cricket games may soon be over. We may soon be throwing things at two Chch academics instead Cricket formula fairer – S T U F F

“Most corporate employees complain about the endless meetings and work protocols that stand in the way of their productivity. But anyone who works for herself will tell you that, even when all the corporate noise is stripped away, it’s still hard to get things done. Maybe even harder.” 8 Rules to Stay Productive When You Work for Yourself - F O R B E S

So much teaching has become so compressed, that like pasteurisation most of the goodness has been squeezed out. “I think we need to better understand the processes involved in digesting learning, so that we can experiment and find faster "transmission speeds" for learning—the training program equivalent of going from the 56k modem to high-speed cable.” The dangers of pasteurised learning – David Rock, A . S . T . D .

Here’s an article on the depth of Amazon’s ground-breaking innovations in the book industry and how The New York Times and others are leading a charge to punish this successful American company, on which many authors now depend for book sales. The Luddite-Statist Attacks on Amazon – Gen La Greca, G E O R G E R E I S M A N ’ S B L O G

And finally, ‘tis the time of the year for fresh-hopped (or wet-hopped) beers! Fresh-hopped beers are brewed “using the cones within 24 hours of picking”—creating “a celebration of flavours and aromas, but not particularly hop bitterness.” It seems that “fresh hop beers are about subtle nuances” using “base beers that are hop centric, but not extreme.” Bugger. Fresh hop beers – Fritz Kuzuck & Maria Grau, N E L S O N M A I L Pic of the 8 Wired drop Fresh Hopwired courtesy A Girl & Her Pint

Wednesday, May 02, 2012

Immigrants are a breed apart

I was thinking thoughts like those posted below a couple of weeks ago when I attended a citizenship ceremony at the Auckland Town Hall to watch a close friend “get the operation,” as we say. (That’s the picture on the right.)

I’m not at all a fan of state ceremonies, but this one—held four times a year, for around 400 people—left me with a huge smile on my face for the reasons so well articulated below.

Those of us who choose to become immigrants are a breed apart. Not only do we uproot ourselves, leaving behind everything familiar and comfortable, but we do it with aplomb. We are adventurous souls in search of a better life, fully aware we may not find it, but fearless enough to light out anyway.In the debates about immigration in Australia, [New Zealand] and America, the one thing left out of the discussion is actual immigrants and what they bring to their new countries. In Australia, [New Zealand] and America, immigrants are viewed as parasites at worst or unimportant at best. ‘We don’t need more people,’ is the common refrain. Due to decades of welfare statism and environmentalist propaganda, immigrants are no longer welcomed as those who will enrich the societies they move to, but rather native-born locals view them with suspicion or, dare I say it, derision. It may be true that some immigrants are layabouts only seeking to live off of others, but I believe the vast majority are resourceful and hard working. Think about it. To make the enormous effort to plan and then move to a new country, often without knowing much about the place he will call home, an immigrant must be more independent than the average person. When he arrives in the new country, he must begin the work of getting to know his way around, finding a place to live, meeting new friends, and the list goes on. The last thing on the mind of a new immigrant is how he can ‘game the system’ so he can sponge off of others. Even the dreaded ‘boat people’ (a term I find profoundly insulting to those who endure extreme hardship to find a better place to live) are far more virtuous than given credit…

Every person who came off the stage at the Town Hall was beaming. Everyone had come here by choice. Every one was, quite literally, consciously starting a new life.

As would be anyone so desperate as to struggle to these shores by boat.

John Key seems willing to demonise the non-problem of desperate people simply to divert attention from his government’s problems.

In the not quite 100 years since the founding of your institution, America has exchanged central banking for a kind of central planning and the gold standard for what I will call the Ph.D. standard. I regret the changes and will propose reforms, or, I suppose, re-reforms, as my program is very much in accord with that of the founders of this institution. Have you ever read the Federal Reserve Act? The authorizing legislation projected a body “to provide for the establishment of the Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper and to establish a more effective supervision of banking in the United States, and for other purposes.” By now can we identify the operative phrase? Of course: “for other purposes.”

walking out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.

CUNLIFFE: When you start closing down your government services and firing your workers, those people have no money to spend. Because they have no money to spend, the local businesses suffer. So they start firing staff. And so the economy goes into deep recession, with no easy way out.

This is a common Keynesian notion. It’s also complete bollocks.

In a quick response to his argument I said this:

PC: Spending doesn’t stop when you start closing down government services. It just changes its form: the money that was taken to buy government waste and pay back government’s debt is left in the producers’ hands and spent instead on private production and capital formation. So instead of spending it on arseholes to play with paperclips, the money can be spent instead on new capital goods—on production instead of consumption—on industry not on bureaucracy. This is what actually produces wealth (as Adam Smith could teach Cunliffe) and why cutting government leads not to recession, but to prosperity.

Misunderstanding my point, my interlocutor responded thus:

Spending doesn’t stop when you close down your government services? I sure hope that it does! Because we're borrowing what - a couple of billion every week to flush that money straight down the toilet of benefits! [I believe the figure is $300 million a week, at the last count!] … That's NZ's problem in a nutshell: spending that NZ cannot afford, taxing high-value Kiwis at a marginal rate of 60%+, and still borrowing massively to plug the "shortfall" of funds that are immediately flushed down the toilet. NZ must stop borrowing! NZ must stop taxing! and above all - NZ must stop spending!

I agree with my questioner. Government borrowing does need to stop. Government spending does need to stop. But my point is that this does not mean spending in the economy stops too.

LET’S ASSUME THAT INSTEAD of borrowing to shore up the government’s balance sheet (which these days means shoring up the balance sheets of banks stupid enough to lend to governments) that government spending were instead to drop by one billion dollars per year. (We wish!)

Does that mean that there are now one billion fewer dollars being spent in the economy? No, it doesn’t.

What Cunliffe and Keynes assume is that government spending just falls out of the air like manna from heaven, expending its blessings in similar manner. Their ignorance is brilliantly summed up by Dave Barry:

See, when the Government spends money, it creates jobs; whereas when the money is left in the hands of Taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs.

You see, government itself produces nothing. It only consumes. So every dollar government spends must first have been taken from someone else. From someone else. From taxpayers. Whether the govt spending comes from taxes, inflation or borrowing, their spending sources is you, me, your uncle, your aunt, your friendly local industrialist and your friendly local entrepreneur.

So if government is not spending one billion dollars that was being previously being taken from you, me, your uncle, your aunt, your friendly local industrialist and your friendly local entrepreneur, then you, me, your uncle, your aunt, your friendly local industrialist and your friendly local entrepreneur will now be spending it instead!

You see my point?

Now, if you, me, your uncle and your aunt carry on spending that money that’s now in our pockets, then to that extent the level of consumer spending is the same. (Yes, Virginia, all government spending is consumer spending.)

But if your friendly local industrialists and entrepreneurs start spending the money that is now back in their pockets, then it’s more likely they’re going to spend it on new investment and on new factories, on new capital goods (which raises wages) instead of consumer goods (which depletes them). On new production (which grows the wealth) instead of consumption, which consumes it. (Yes, Virginia, that’s why it’s called consumption).

So spending is not one billion dollars less, but in the first year it will be almost precisely the same—yet in the second and subsequent years this spending will be increased by virtue of the new productivity that has now entered the economy.

And jobs? The number of jobs in the economy will be at least the same, because the same amount of money is being spent—but in this and subsequent years wages would grow higher as the amount of capital goods available increases.

This is a good thing. A very good thing. This is in fact how economies grow: by investing and reinvesting in new capital goods and new innovation, which raises and continues to raise real wealth and wages.

And instead of an economy crammed full of bureaucrats and arseholes with clipboards, we move towards one crammed full of producers—and with people who earn those rising wages.

Now, it might be objected that even if you and I don’t bake it into pies, we might—just might—put our money into savings instead of into our local Harvey Norman. Is this a bad thing? Far from it: because consumption is not the engine of economic growth, never was; and in fact 0ur pool of real savings provides the fertiliser for producers who borrow it. Because saving doesn’t subtract from spending it just changes its form. The more we save, the bigger the pool of real savings from which producers can borrow to expand their production.

The more we save, the more we grow. That’s a good thing, right? In the current environment, it’s the most likely way we’re ever going to get ourselves out of this hole.

AND WHAT ABOUT AUSTERITY? Well, let me say a final word about “austerity.”

Consider that governments around the world have borrowed and spent around 100 trillion dollars in the last decade.

100 trillion dollars!

And they may as well have gone ahead and baked it into pies for all the good it would have done. Unless you’re Gerry Brownlee, pies would have done far less damage. (Just imagine what genuine producers could have done with 100 trillion dollars!)

So governments have borrowed like all hell in a five-year-long fit of foolishness, and apart from a very few examples (Estonia, Sweden) none have actually cut their spending at all. None have given it back to taxpayers. Some have slowed down the growth in their spending. (Which muppets like Cunliffe call “austerity.”) All are in thrall to the wreckless irresponsibility sponsored by John Maynard Keynes, endorsed by David Cunliffe et al, and demanded by voters who finally discovered how easily (they thought) they could vote themselves benefits from the public treasury.

That so many of them are now in the streets protesting the bailouts of the very banks to whom their governments are in hock is perhaps the final irony.

And when you understand that it is to the local variety of these know-nothings that the would-be next Labour Party finance minister is making his pitch, you will begin to understand just how nasty the next decade in this country might be.

Tuesday, May 01, 2012

And the problem with political donations is …

In the last week alone the only political stories that seem to have mattered involve political donations, political favours, and behind-the-scenes revelations about the way deals are done in this cosy little banana republic of ours.

How much did Kim DotCom give John Banks, and what for?

How much did Sky City’s Tony O’Brien give John Banks, Mike Hosking, Len Brown and John Key—and what did he expect in return?

What did Sky City’s Tony O’Brien discuss with Labour David Shearer over wine and dinner, and who exactly will wind up with the tab?

Who spoke to whom first about splitting their donation into two cheques so it could be anonymous?

Who spoke to whom about Kim DotCom’s mansion?

Who spoke to whom first about bankrolling a convention centre?

Who spoke to whom first about what political favours might be granted in return for a mostly unsubsidised building?

The basic question seems to be “How much did donors give?” And “What did they get, or expect to get, in return?”

At the same time Duncan Garner has raised concerns about the access and anonymity of lobbyists who have been granted perpetual, free, and anonymous access to parliament to put their clients’ wishes in the ear of politicians who might favour them. And we have heard lobbyists like Mai Chen, who has momentarily fallen out of favour, whinging about the access now given to others that she once enjoyed with a different regime.

Politics costs money, and our politicians are knee-deep in the stuff. And if you listened to or read all the editorials, commentary and hand wringing from political opponents about all this, you’d be hand wringing with them saying “something must be done.”

But what the editorial writers, commentators and out-of-power politicians haven’t yet grasped about the problem is that it is the very system they endorse that increases both the magnitude and importance of the problem.

Consider: There are arguments about whether donations follow policy or policy follows donations, and it's frankly impossible for anyone but the donor to know which is which and whether they're getting value for money.

Which points to the real problem here, doesn’t it: not that rules about lobbyists and political donations need to become tighter, or more rigorous, or that lobbyists or donors should all be named—no matter how small or insignificant the donations, or how dull and incompetent the lobbyist—or even that a register of lobbyists and donors is drawn up.

The real problem here is that politicians have almost unlimited power to deliver policy and favours in which donors and pull peddlers are interested. Policies that so often deliver special privilege, or special favours, or monopoly interest, or—in the case of Kim DotCom having to pull favours just so he could buy a house, for example—sometimes just to simply allow someone to do something that in a free country they should every right to do, without having to ask some busybody’s permission.

So the real problem here should be clear.

The problem is not with the donations themselves. The problem lies with the power politicians have to deliver those specialprivileges.

Or to put it another way: The problem is not chiefly that policy might follow donations, but that politicians have the power to deliver the policies favoured or asked for by special interests.

That’s what really stinks. And that’s why political donations smell.

Looked at dispassionately, political donors aren’t usually giving money just because they like the cut of someone’s jib. That’s not why the racing industry donated to New Zealand First, or why Fletcher Building donated to the National Party. They’re simply doing what needs to be done in a system in which the monstrosities they donate to have the power of life or death over their businesses.

And lobbyists don’t spend time pouring alcohol down politicians’ throats because they like the pleasure of their company. (And if they did, you would really have to question their judgement.) They do it because they get paid to cosy up to politicians so those paying them can extract a cosy deal themselves from the friendship.

So this is the real problem which the hand wringers need to face up to--that there are no restrictions whatsoever on how much politics can do once they have power, no limit to the favours politicians can dispense, and as long as that remains the case and as long as they have unlimited power and virtually unlimited support to use it for meddlesome ends, then the temptation will exist to buy politicians to direct that meddling in donors’ favour.

This is not an argument then to restrict donations. It is not an argument to ban or register lobbyists. (These people, the “pull peddlers” and the bag men, are just the inevitable cockroaches who take advantage of the looters' own system.) What this is, is a very good reason for the levers of political power to pull so much less weight than they do now. It is a good reason to place constitutional restrictions on politicians, to tie them up. It is a good reason, not to restrict us in how much we can spend on our favoured party when it’s trying to win power at election time, but instead on how much parties can do once they have power.

In short, if you don’t like political donations being used to influence politicians, then don’t support a system that gives politicians so much influence. Because as PJ O'Rourke says,

When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.

Isn't that the point right there in a nutshell?

Restrict the range of areas in which legislators can meddle, and you immediately lessen the interest in buying political power.

Remove the power of government to take away your property, or to command your obedience, and the influence of pull peddlers and bag men would disappear – and so would they.

Capitalism without Guilt: The Moral Case for Freedom

Like I said, these live-streamed Objectivist events are coming thick and fast now. Given this is a talk examining why the free market has erroneously been blamed for the financial crisis, perhaps someone could send the link to David Cunliffe?

Capitalism without Guilt: The Moral Case for Freedom

Description: Many regard the financial crisis as a failure of the free market and "greedy" businessmen. But is capitalism really to blame for our current economic mess?

In this talk, Dr. Brook argues that today's crisis is a failure of the un-free market. Massive government intervention, from Washington's affordable housing crusade, via Fannie Mae and Freddie Mac, to the Federal Reserve's easy money policies, laid the groundwork for the crisis. Dr. Brook will then evaluate the government's response to the crisis and suggest alternatives.

Dr. Brook will also explain why the free market has taken the blame for a crisis caused by government intervention. While most people are quick to blame capitalism for any evil because it encourages selfishness and rewards the profit motive, Dr. Brook will argue that these traits are precisely what make capitalism a moral system.

Bio: Dr. Brook (MBA, University of Texas at Austin; PhD, Finance, University of Texas at Austin) is executive director of the Ayn Rand Institute. He is a columnist at Forbes.com, and his articles have been featured in the Wall Street Journal, USA Today, Investor's Business Daily, and in many other publications. A frequent guest on a variety of national television programs, he is co-author of Neoconservatism: An Obituary for an Idea and contributing author to Winning the Unwinnable War: America's Self-Crippled Response to Islamic Totalitarianism. His newest book, Free Market Revolution: How Ayn Rand's Ideas Can End Big Government, is co-authored with Don Watkins, a fellow at the Ayn Rand Institute, and due out September 2012. A former finance professor, Dr. Brook speaks internationally on such topics as the causes of the financial crisis, the morality of capitalism and ending growth of the state.

NB: As always with these live-streamed events, you can either watch them in the comfort of your own domicile, or if you’re near Mt Eden bring your lunch and join us here at the Organon Architecture offices, Level 1, 236 Dominion Rd (corner of Valley Rd and Dom Rd).

Morality and Religion

How many times have you heard it said that without religion, morality is impossible? Good and evil would lose their meaning and no one would bother to do the right thing.

But what if the truth is actually the opposite? What if, on a proper conception of morality, religion is the enemy of the good? In this provocative talk, Dr. Onkar Ghate explores these questions from the unique perspective of Ayn Rand's radical rethinking of morality.

An extended Q&A will follow the talk.

Who: Dr. Onkar Ghate, senior fellow at the Ayn Rand Institute What: A lecture examining good and evil and the role of religion in morality When: Wednesday, May 2, 2012, at 12:30 p.m. NZ time

Bio: Dr. Ghate teaches at the Institute's Objectivist Academic Center, speaks on philosophy and Objectivism across North America, and publishes scholarly articles on Ayn Rand's fiction and philosophy. His op-eds have appeared in the Houston Chronicle, Las Vegas Review-Journal, Providence Journal, San Diego Business Journal, Orange County Register and BusinessWeek.com. He has given numerous radio interviews, including BBC Radio, and has appeared as a television guest on CNBC, KCET, Fox News Channel and the CBS Evening News. Dr. Ghate received his doctorate in philosophy from the University of Calgary.

NB: As always with these live-streamed events, you can either watch them in the comfort of your own domicile, or if you’re near Mt Eden bring your lunch and join us here at the Organon Architecture offices, Level 1, 236 Dominion Rd (corner of Valley Rd and Dom Rd).

I didn’t expect to agree with it, but I at least wanted to know what it is, this “vision” of his of “economic development.”

Now, his speech to the faithfully invited did indicate where he might take Labour if he were in charge, i.e., even further down the gurgler from where it is now, but what it mostly contained was not vision but bullshit, bluster and ego-driven ennui: a litany of historical errors and a mess of shop-worn cloth-cap clichés.

But there was nothing at all about economic development. Nothing at all to even suggest he understands how economies do develop. And if there is any “vision” at all in David Cunliffe’s head, the evidence is those visions are somewhat like those of Saint Joan’s—which is to say of himself at the head of some “True Labour” Column.

Perhaps he has forgotten she was burned as a heretic.

The whole sorry speech deserves a good fisk, but who has the time. So let me just pluck out a few of his more farcical pronouncements on history, on economics, and on politics… [Cunliffe’s flaccid prose is in italics.]

The major reason that voters didn’t vote for Labour, and sometimes didn’t vote at all, is simply that Labour failed to inspire voters that it was a credible alternative to National.

Really. No shit.

You hear the National government talking about the need to sell assets because we have so little money in this country. Do you know why we have so little money in this country? It’s because a large percentage of our economic assets are overseas-owned.

No, it’s so much spending of the spending in this country is poured down government holes instead of building up the capital structure—which means so much that New Zealanders do save goes to better homes overseas where they can find decent investments, instead of here.

And because so few large assets are easily bought by wealthier foreigners. (Cunliffe does realise that every purchaser of an asset has to hand over money to the local owners first, doesn’t he, who can then re-invest it here to make greater profits—essentially doubling available local capital with every foreign purchase?)

While the hippies were out protesting in the streets [in the 1970s], a professor at the University of Chicago called Milton Friedman, was selling his students the idea that taxation was evil and that businesses worked best when they were deregulated.

Actually it was Ayn Rand arguing that taxation is theft. Unfortunately, Milton Friedman and his Chicagoites just wanted to make taxation more “efficient.” Which they did: the total tax take under Roger Douglas and David Lange’s Labour Party went up to its highest ever level; something about Friedman would be delighted and Douglas was. But Rand would not be.

Does this sound familiar? It should be. The Republican Party in the US, the Conservative Party in England and the Labour Party in New Zealand enthusiastically took up Friedman’s philosophy, which is now called neo-liberalism.

Neo-liberalism has become such a dominant economic philosophy that it is now the only economic philosophy taught in many universities.

This will be news to anyone studying politics or economics in virtually any university in the world, even in Friedman’s Chicago home-base. And to anyone studying under Jane Kelsey or Tim Hazeldine.

Friedman revived a belief in the “invisible hand” of the market. It was a fairy tale that Adam Smith had said a century earlier would automatically deliver the best of all possible economic worlds.

It was actually two centuries before Friedman became popular that Adam Smith produced his analysis of what made nations rich--in the eventful year of 1776 to be precise. (Maybe Cunliffe should have studied history at Harvard instead of poetry?) Adam Smith’s answer to the question of what made them rich was, famously, division of labour. But “Silent T” apparently knows nothing of this, since the reader will search in vain in Cunliffe’s many turgid writings for anything understanding what Smith might have said, or for anything in Smith suggesting division of labour would “automatically deliver the best of all possible economic worlds”—or for knowing what else might have happened in 1776. Because Smith observes in some detail that the division of labour, and the freedom it requires, allows new resources to be produced and discovered and put to their best, most highly-valued use, producing more wealth and infinitely more real harmony than the pressure-group warfare of Mercantilism that Smith’s opponents (and “Silent T”) invariably seem to favour. And for those who fail to see the economic plan in the free market, rest assured there is one. It’s called the price system.

Of course many of the rogues who benefited from [‘neo-liberalism’] have never believed [Smith’s story] – they remember how they got rich… The people who were the most enthusiastic supporters of neo-liberalism were … advisors to government.

If he had read Smith’s Wealth of Nations (described by PJ O’Rourke as the study of why some places are as rich as hell and others just suck), Cunliffe would have noted Smith’s derision in passages like these at the type of “businessman” who gets rich by government favour: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.” Note too that Cunliffe’s “vision,” or what there is of it, calls for more government subsidies for business, not less. Ask yourself what type of “businessman” this policy will favour.

Did you know, for example, that British Labour Prime Minister Tony Blair, regularly lunched with Rupert Murdoch, the far-right media boss? Tony, apparently, used to test which policies would be acceptable to Murdoch.Thus we have a far-right media boss influencing the policies of what was supposed to be the party of the people. It’s shameful.

This is blatant hyperbole, heading off into Ian Wishart territory. But perhaps Cunliffe just prefers the media owners, media people, and media trainers that Helen used to lunch with-and with whom he would like to break bread if he ever manages the ascent of the greasy pole.

I think that’s a major reason that nearly one million voters deserted us at the last election. It wasn’t because we failed to communicate our policies. Quite the opposite. Those voters saw that our policies – with the exception of asset sales – were mostly the same as National’s.

Largely because National’s policies were copied from Labour.

The good news, if you can call it good news, is that the economic myths that drove the world into this current mess are starting to unravel…Europe’s current economic crisis was caused by bankers who loaned money on riskier and riskier ventures until the whole structure collapsed.

Um, actually Europe’s current economic mess was caused by government’s borrowing to pay (first) for their bloated and obese welfare states, and (second) to pay for the failed stimulunacy that has left them in a deeper hole and still digging.

And you know what? Despite all the promises that the European economic austerity measures would turn this tragic situation around, the opposite is occurring.

And you know what? The only governments in Europe attempting anything remotely like austerity are Norway, Sweden, Switzerland and Estonia (whose government currently has the only balanced budget in the Eurozone). These are the few Europeans who are doing even relatively well. As for the UK government itself, despite the political rhetoric Cameron and Osborne have imposed the very opposite of austerity. For the past five years their deficit has been between two to five times that of New Zealand…

Austerity economics does not work. It did not work in the Great Depression of the 1930s and it will not work in the Great Recession of the current decade.

Once again Cunliffe’s history fails him. It actually did work: in every place that it was tried. What didn’t work was the Keynesian stimulus of Roosevelt’s America: their recovery had to wait until 1946-47, when govt spending plunged after the war and ten million came home to start producing things instead of shooting at other soldiers.

When you start closing down your government services and firing your workers, those people have no money to spend. Because they have no money to spend, the local businesses suffer. So they start firing staff. And so the economy goes into deep recession, with no easy way out.

Spending doesn’t stop when you close down your government services. It just changes its form: the money that was taken to buy government waste and pay back government’s debt is left in the producers’ hands and spent instead on private production and capital formation. So instead of spending it on arseholes to play with paperclips, the money can be spent instead on new capital goods—on production instead of consumption—on industry not on bureaucracy. This is what actually produces wealth (as Adam Smith could teach Cunliffe) and why cutting government leads not to recession, but to prosperity.

You know, these problems that we face today stem from a lack of appropriate regulation or a lack of enforcement of existing regulations. The global financial crisis was caused by unregulated banking…

This is a complete fantasy. The three areas of the US, European and local economies that are and were most heavily regulated are the production of money, the production of housing and banking. It is no accident that it was the intersection of these three industries where the crisis began. Perhaps Mr Cunliffe could read about the true causes of the crisis before he travels the country spouting his fantasies.

Leaky building syndrome was caused by deregulating the building industry…

SO ANYWAY, WE’RE NEARLY two-thirds through this grand-standing “positioning paper” and still yet to see a “plan.” Perhaps this is it:

Do I favour supporting positive businesses? You’re damned right I do. Businesses help create jobs and economic growth. I want to see a future Labour government get stuck in and do more to help the economy grow. Do I support all businesses? No way. Businesses that let workers die unnecessarily, or abuse and exploit their workers, or steal from old people: all these business need a strong, legal response from the state. All this requires regulation…

This is all that can be found in his diatribe that even remotely approaches his promised delivery of a “simple, credible economic development plan.”

And all it amounts to is three paragraphs of tax, subsidise and regulate--a vision promised by a man whose biggest “achievement” as minister was to eviscerate the country’s biggest business and nationalise its infrastructure.

In other words, it’s a wet dream for a command economy—a plan without a plan, and vision without any vision; a plan like that of Karl Marx’s, of which Ludwig Von Mises observed it “just assumed roast pigeons would in some way simply fly into the comrades' mouths, while omitting to even consider how this miracle is to take place.”

It is a sign of Labour’s desperation that anything in that could be taken for vision.

Does Cunliffe know anything about economics? This speech is awful. A few quick points.

"While the hippies were out protesting in the streets [in the 1970s], a professor at the University of Chicago called Milton Friedman, was selling his students the idea that taxation was evil and that businesses worked best when they were deregulated."

Friedman wanted markets regulated, but he knew that the best form of regulation is competition

"Does this sound familiar? It should be. The Republican Party in the US, the Conservative Party in England and the Labour Party in New Zealand enthusiastically took up Friedman’s philosophy, which is now called neo-liberalism."

As Friedman (see “Capitalism and Freedom”) said himself his philosophy is call classical liberalism. "Neo-liberalism has become such a dominant economic philosophy that it is now the only economic philosophy taught in many universities."

Do any universities teach courses in "economic philosophy"? Most economics departments will teach many things I'm sure Friedman would not like, they will argue that there are many reasons for market failure and government interventions.

"Friedman revived a belief in the “invisible hand” of the market. It was a fairy tale that Adam Smith had said a century earlier would automatically deliver the best of all possible economic worlds."

No one says that. Adam Smith never said that and no economist today says that. The best you will get is that markets are better than the alternative.

"You know, these problems that we face today stem from a lack of appropriate regulation or a lack of enforcement of existing regulations. The global financial crisis was caused by unregulated banking…"

Unregulated banking?!! One of the big problems with banking was over regulation. People believed that the government has made banking safe and no business is safe. The moral hazard problems the government caused are still with us.

Paul concludes, “If this speech is an indication of the quality of economic advice Cunliffe is getting he needs to change his advisers.

Cunliffe outlines plan for economy; forgets planDrawing attention to his speech on Red Alert, he titled his post Economic Development Ideas, and in his introductory remarks promised to tell us what a Labour economic development plan should contain. Yet nowhere in his speech is there a specific policy to be found…Despite devoting at least two thousand words to the failures of neo-liberal economic policy, not once does he deign to sully his flowery prose with anything so base … Cunliffe’s speech may well have its merits as a means of motivating Labour’s base and laying the groundwork for a leadership challenge. Measured against its stated goal of articulating a new economic plan for New Zealand, however, it is nought but facile verbiage, bereft of ideas, wanting of genuine thought and devoid of purpose beyond rhetorical attack on economic freedom. Before his next speech, perhaps Cunliffe would do well to reflect on the words Churchill once dedicated to a waffly Labour politician of his own time: “We know that he has, more than any other man, the gift of compressing the largest number of words into the smallest amount of thought.”

Tip Jar

In America, they tip. In NZ, we shout beer. If you like the service here at Not PC, drop a tip in the tip jar and you can do both.

Recent
Comments

Friday Morning Ramble: The ‘Week of Sideshows” Edition
The Greens should translate their policies to Klingon, too, and perhaps they would make sense.
thank you for another friday of intellect, things to think about. like yo always are
Some questions for today
"If 18-year-olds are old enough to choose which politicians get to ruin the country, why aren’t they old enough to choose whether or not they have a drink?"That looks like a fallacious argument. (or the start of one)Don't know which fallacy though.I suppose it demonstrates a weakness of using age rather than ability to determine what the law allows.
@Jon: I don't grant the first premise, but it's astonishing that so many of those who do so refuse do acknowledge the second.

"I suppose it demonstrates a weakness of using age rather than ability to determine what the law allows."

Yes, partially. More importantly it demonstrates what happens when law tries to model behaviour.
Immigrants are a breed apart
Can't agree more. Are the first Maoris or the first Europeans to set foot on Aotearoa considered as "boat people" as well ?

For my partner and I who want to settle in NZ after having sailed from Europe (argh, some other "boat people"), we are suspects by default (especially about health, mainly because of the socialist health system) even if the probability is very high that we will end up being net contributors both in added value and taxes. Taxes that we already have to pay as any Kiwi without expecting any benefit at all, by the way.The suspicion is at its greatest when the migrant-to-be does not want to be an employee but wants to create a business in NZ, although this is the way he can bring the most to the country.

The welfare state is as usual a source of tensions between people, as it can be expected in every - forced - redistributive system where "everyone tries to live at the expense of everyone".
Immigrants. The more, the merrier.
Nice article, thanks for the information.
Face it Pete the N.Z psyche is twisted. A family that leaves for Australia, tells all their mates back home “it’s great it is over here” every friggin' chance they get, yet are still regarded as Kiwi’s by the masses. Contrast this with a family arriving into N.Z from China with limited English, working their guts out, strugglng to assimilate, contributing to the economy/society – yet will always be regarded as a foreigner? The real foreigners are those that jumped ship, live in a foreign land not those that travelled tens of thousands of miles to become Kiwi’s like all of our ancestors did at one point.
This blog is vehemently anti-taxation yet you support bringing boat people in when they would cost millions in welfare, healthcare etc. A bit of a discrepancy there
@Alan:

I referred him to the post above. In that post, Jason says, "Think about it. To make the enormous effort to plan and then move to a new country, often without knowing much about the place he will call home, an immigrant must be more independent than the average person. When he arrives in the new country, he must begin the work of getting to know his way around, finding a place to live, meeting new friends, and the list goes on. The last thing on the mind of a new immigrant is how he can ‘game the system’ so he can sponge off of others."

You can argue against that if you wish, but don't pretend it hasn't been pointed out.

And consider this: in the 19th Century millions upon millions of dirt-poor immigrants headed out to Australia, New Zealand, America and Canada in search a new life, all yearning to breathe free.

They didn't "cost" anyone millions--they built whole new countries.

Ask yourself what is different today?
Probably what is most different today, compared to those earlier times, is the excessive amount of regulation, stopping people from using their initiative, tenacity and survival skills in getting on with starting a new life. You only have to view early tools and machines at places like Motat and Matakohe museum to see these skills brought to fruition. NZ should be moving towards a confluence of peoples. Perhaps some sort of guaranty system could be used for refugees?
"Perhaps some sort of guaranty system could be used for refugees?"

Or even some sort of sponsorship scheme...
My comment wasn't regarding immigrants in general - it was pointing out the obvious incongruence between your stances on refugees and taxation.

Most, if not all Indonesian refugees will be unskilled and uneducated. The only realistic way they can get by is through welfare.

In your non-welfare utopia what happens when a boatload arrives and there aren't enough voluntary sponsors? Begging & stealing on Queen St probably
Alan...you have a low and historically incorrect view of ordinary Kiwis and most people in general. People in REAL need are overwhelmed with charitable aid and benevolence here all the time...look what happens when tourists are robbed of all their stuff the first day off the plane...or a family's Christmas presents are taken in a burglary. People from all over send them replacement stuff,offers of accommodation and money to help...no state gun required.The same will happen for genuine refugees in need of help arriving here....never doubt it.The only problem is if the state is taking so much of peoples wealth that it hardens them against helping and makes them circle their wagons around what they have left...which is what a greedy state causes to happen.
Alan your suggestion that "refugees will be unskilled and uneducated. The only realistic way they can get by is through welfare" reveals your attitudes and beliefs and is part of the problem reflected in parts of NZ today. We have moved away from regarding skills (practical)and 'a wealth of experience' as highly valuable, and now require everyone to have a piece of paper to prove they 'know' something. To cite how eroneous this viewpoint is just look at the building industry. We have houses built in the 1920s by trade trained on-the-job labour (in your opinion these would be unskilled since they probably left formal schooling at age 11 or 12). These houses are still standing and are considered amoung the desirable types of residences to own and live in. today we have virtually done away with practical skills training and encouraged people to get 'pieces of paper' to prove they know about building - the result - leaky buildings, lack of building crew staff with practical skills and understanding of how things are put together. Some can't even read plans! Also why do you think they want to end up on welfare? If refugees and immigrants have enough gumption to get up and mobilise to make it to the other side of the world to create a new life they sure as **** are going to sit on their bums receiving welfare. They create businesses, buy businesses, educate and care for their kids, maintain their culture and actually display many of the attributes many would like to see injected into the 'welfare' population. Your view indicates a negative view of human potetial, and an abdication of decision making to top down government (who unfortunately, far from being wise, is often as ignorant as your views indicate)
Just an idea - for sponsorship (guaranty) of refugees and immigrants - 'welfare' families could voluntarily be involved in order to learn from the immigrants. Okay its an idea that might a bit of working out, true
"Just an idea - for sponsorship (guaranty) of refugees and immigrants - 'welfare' families could voluntarily be involved in order to learn from the immigrants."

I think that's a FANTASTIC idea!

"Okay its an idea that might a bit of working out, true..."

But worth it. And it would be absolutely splendid politics!

How about you start writing up the idea a little?
Well, The boat people who gang rape, intimidate And make demands of their new country , Australia, while in detention waiting to be processed, certainly have gumption, but they are hardly desirable. A read of Ayan Hirsi Ali's "Nomad" and "Infidel" wouldn't go astray. It might shatter some Kumbaya illusions.
I'd endorse the recommendation of Hirsi Ali's books. But also point out that they're hardly relevant,

Also, the words "...in detention waiting to be processed..." hardly inspire a group hug.

And your use of the words "boast people" don't inspire me with any respect for their user.
It's just a phrase, Peter. I'm not against immigration, just indiscriminate migration. I dont think what Hirsi Ali describes in her books is irrelevant.
Lets get rid of compulsory taxation first, then we can organise open immigration. I'm afraid the growth of the welfare state since the end of the fifties suggests our immigration policy has been an expensive one. There is a world of difference between someone coming in from the UK and someone from the third world in terms of their ability to slot into society easily become productive quickly.
@Richard:

"I'm afraid the growth of the welfare state since the end of the fifties suggests our immigration policy has been an expensive one..."

You imply that immigrants cost taxpayers more than they produce. You have evidence for this?

"There is a world of difference between someone coming in from the UK and someone from the third world in terms of their ability to slot into society easily become productive quickly."

Sure is. There are very few whinging trade unionists coming here from the third world.

But they're not educated properly! you say. And NZ born students are?!

But most are dirt poor shanty dweller who can't even read! you say. Well just what the fuck sort of people do you think it was who built North America and Australasia in the nineteenth century. They weren't exactly the cream of the crop, you know.

But we might catch diseases from them! you say. Yes, we might. Like the 'disease' of hard work.
@Richard and @KP: Some reading for you:

Immigration plus Welfare State equals Police State - George Reisman
I don't know that I do know that. Understandably you detest the detention centers, but they do not violate those illegal immigrants rights. They are housed, fed, clothed, given internet access, a library service, exercise facilities, and made comfortable, while authorities determine who is who. The alternative is to let them loose on Australian streets. An injustice to Australians. I don't know what your criteria is for rejection of would be immigrants, but even with open immigration you would still have illegals pouring in. Would you detain them in detention centers to be processed, or would you send them straight back to where they came from?

Btw, thanks for the reading material.
People need to understand that Peter's contradictory views on immigration stem from the fact that Ayn Rand had immigration issues back in the day.

Sounds ridiculous but it's true.
The Reserve Bank: Lock the doors and leave the building to the four-legged rats
Cool. I love it when he asks the assembled economics graduates, "do you believe in supply and demand or not?"
Spending, “austerity,” and starting to grow again
'Austerity' is simply political doublespeak for increasing the total amount of taxation being taken from the productive.

Key, let's call him a fascist, announced yesterday this year's budget will be pouring more extorted tax money into IRD for a further repressive tax crackdown: as if life wasn't hard enough for businessmen anyway. Also an 'extending' of the current tax base - that last is through further doublespeak called 'base extention'.

I don't have the nice words to tell you what I think of the National Socialists, and when you think waiting in the wings is bigger taxing Keynesian Cunnliffe ... well, shit.
Your comment that spending "on new capital goods...raises wages" is one of the most misunderstood facts of economics. This is not surprising because this is precisely the opposite of what Marx claimed (i.e. that wages and capital are always in conflict). If people understood and accepted this one point and rejected Marx's bitter lies, the world would be transformed.
http://www.macdoctor.co.nz/2011/03/09/deceptive-debt/

An earlier blog about Cunliffe's economic ignorancePeter
And the problem with political donations is …
A great commentary on this situation. Why isn't it obvious to more people.This is where we need a strong political party whose total focus is on less govt interference and influence in our daily lives. A party of citizens who don't look for the power of the party, but the power of the individual.
And what favours do the unions expect for funding David Shearer and teh Labour Party?
I watched a John Stossel special on youtube last night entitled, "Crony Capitalism".

I think if America is neck deep in it, we're up to our eyeballs.
Capitalism without Guilt: The Moral Case for Freedom
Morality and Religion
Rand had a screwed up moral compass too though. She was happy to be fucking Nathaniel Branden although they were both married, but got all upset when she discovered that he had the temerity to be fucking student Patrecia Scott on the side as well !

For this transgression, Rand excommunicated Branden, a man she had anointed as a potential heir to the throne as the high priest of the Cult Of Objectivism
Anonymous? Yes, of course you're Anonymous. Who would want to put their name to garbage like this.

Strange as it might sound, but Rand's affair with Branden was with the full and open approval of both their partners.

In other words, its was open and honest.

Her problem with Branden's affair with Patrecia (which happened long after he had finished his affair with Rand) was that he lied constantly about this and many other things about himself, all while using Rand as a meal ticket from which to make piles of money and a name for himself--which he acquired on the basis of his supposed integrity.

When she discovered his various frauds, she withdrew her endorsement of him as a spokesman for her ideas. As you would.

If anyone honestly wishes to know anything about this, then rather than reading dishonest smears on the internet, my best recommendation would be to read James Valliant's 'The Passion of Ayn Rand's Critics.'
Put a fork in your party and turn it over
Opening: ‘Road from Eden’
Seriously? You're friends with this guy? You're actually willing to call his work "art"? What's happened to you, Cresswell? Normally this is the kind of art that you'd be throwing an Objecti- tantrum over, and claiming that it's evil and anti-art.

J
@J; Wipe that froth from your mouth, son.
Huh? After all of the hysterical frothing at the mouth that you've done over art like Wooller's, you try to characterize me as "frothing" when I simply ask why you're suddenly promoting it? Hilarious. You've thrown fits over art that is quite benign compared to Wooller's. In fact, you've often willfully misinterpreted art just so you could rant against it and lecture everyone about the evils that you imagined seeing. Yet here is a flaming leftist with an unambiguously tree-hugging, anti-human-development message in his visual propaganda, and you're cuddling up to him!

You're ridiculous, Cresswell.

J
They endured David Cunliffe, but of vision there was none [update 4]
I've been convinced for some time that there's a terrifying future for NZ. Labour will be running the finances again from 2014, and as bad as the National Soclialists are, Cunnliffe is a big spending, big taxing, Keynesisan economic retard. Even two brief exchanges with him on Twitter last night shows he has no understanding, not even a little bit, of the causes of the GFC.

He will tax business and grow the State at a more horrific rate than Cullen whose unfortunate timing at the finance job squandered the best decade of commodity price booms NZ will see for some time. And freedom: fuck, forget that. An ever increasing trip down the road to serfdom to the Gulag of Good Intentions, and the productive eeking out a living behind the IRon Drape.
Oh, serendipity. After I wrote teh above I nosed over to Granny Herald to catch up with news - I've been fishing for the last four hours :) - and what do I see but this lovely piece about Apple:

From memory, Apple is not one of the most valuable companies in the world by market capitalism: even without that it would be harder to name any other company that has been more innovative over its lifetime. And why has Apple been so successful? Well for a start, it would seem, it's been keeping its tax bills trimmed smarter than any of it's competitors, so has had the extra money to reinvest in its core activities, and reward it's owners, rather than see profits extorted to grow the power of politicians and be redistributed to the welfare states to so be destroyed, in the countries it operates. And we are all better off for that.

Work that into your big tax world, Cunnliffe.

This was written on my third generation IPad, which I am in love with. Truly.
"Unfortunately, Milton Friedman and his Chicagoites just wanted to make taxation more “efficient.” "

I'm not so sure. An efficient tax system would drive an efficient government and Friedman has this to say about efficient government:

"The United States today is more than 50% socialist in terms of the fraction of our resources that are controlled by the government. Fortunately, socialism is so inefficient that it does not control 50% of our lives. Fortunately, most of that is wasted. People worry about government waste; I don't. I just shudder at what would happen to freedom in this country if the government were efficient in spending our money." it’s so much spending of the spending in this country is poured down government holes instead

You know, it wouldn't even be so bad if the borrowed billions were "poured down government holes" - we might have good roads, broadband, secure prisons, and effective police force, an effective defense force, or even railways and public TV (if that's what floats your boat). But, of course, the money is actually flushed down the toilet of benefits & entitlements. Dole, DPB, health & education & super (and all for people who don't love their children enough to provide for them properly, or make provision for their old age).

Spending doesn’t stop when you close down your government services

I sure as FUCK hope that it does! Because we're borrowing what - a couple of billion every week to flush that money straight down the toilet of benefits! Without borrowing, can NZ afford all those schools, hospitals, KFCs, bowling clubs, RSAs and the rest - all paid for either by borrowing or by the 5% of Kiwis who actually earn overseas exchange and thus pay for all the rest?

That's NZ's problem in a nutshell: spending that NZ cannot afford, taxing high-value Kiwis at a marginal rate of 60%+, and still borrowing massively to plug the "shortfall" of funds that are immediately flushed down the toilet.

NZ must stop borrowing!NZ must stop taxing!

and above all - NZ must stop spending!
Does Cunliffe know anything about economics? This speech is awful. A few quick points.

"While the hippies were out protesting in the streets [in the 1970s], a professor at the University of Chicago called Milton Friedman, was selling his students the idea that taxation was evil and that businesses worked best when they were deregulated."

Friedman wanted markets regulated, but he knew that the best form of regulation is competition.

"Does this sound familiar? It should be. The Republican Party in the US, the Conservative Party in England and the Labour Party in New Zealand enthusiastically took up Friedman’s philosophy, which is now called neo-liberalism."

As Friedman (see Capitalism and Freedom) said himself his philosophy is call classical liberalism.

"Neo-liberalism has become such a dominant economic philosophy that it is now the only economic philosophy taught in many universities."

Do any universities teach courses in "economic philosophy"? Most economics departments will teach many things I'm sure Friedman would not like, they will argue that there are many reasons for market failure and government interventions.

"Friedman revived a belief in the “invisible hand” of the market. It was a fairy tale that Adam Smith had said a century earlier would automatically deliver the best of all possible economic worlds."

No one says that. Adam Smith never said that and no economist today says that. The best you will get is that markets are better than the alternative.

"You know, these problems that we face today stem from a lack of appropriate regulation or a lack of enforcement of existing regulations. The global financial crisis was caused by unregulated banking…"

Unregulated banking?!! One of the big problems with banking was over regulation. People believed that the government has made banking safe and no business is safe. The moral hazard problems the government caused are still with us.
The day that I ever vote Labour will be the day that they promise to axe Working for Families and force the bludging beneficiaries out to work in the orchards, dairy farms and forests.

That will be the same day that Air New Zealand starts replacing 737s with pigs.
You know the really appalling about his speech is that I know Cunliffe is smarter than this. It shows the man's complete lack of character that he cyncially exploits populist stupidity about economics in a desperate bid to promote his own leadership prospects just as questions are already being asked about Shearer's competence as Labour Party leader.
Time to start lobbying Cunnliffe now with business ideas. How about a business that catches Clean Green NZ moon beams to sell to Asia. The business will employ 200 people to harvest the NZ's finest moon beams. Moon beams ticks all the boxes.

Cunnliffe in his first month in office will likely cut me a cheque for $25 million. I will of course be taking my consultants fees up front the minute the Cunnliffe’s cheque clears. Anyway it is all for the people of course. Like Cunnliffe I share a faith and admiration for ordinary kiwis.

Would also add that Cunnliffe is a visionary. How dare you attack him this is a border line thought crime. Thin ice indeed. Ordinary kiwis & NZ need to protected from bigots like you lot.
Thatcher banged 'constitution of liberty' not 'road to serfdom' on the table. But excellent article just wish more people would read this instead of listening to MSM
"Thatcher banged 'constitution of liberty' not 'road to serfdom' on the table."

Yes, you';re right. Which does make much more sense.
I can't tell if Cunliffe is genuinely an idiot or is playing to a crowd that revels in idiocy. I put 75% chance of the latter. Not that it helps tons for policy if he gets the reins.
@Eric: His performance as Minister in eviscerating Telecom might indicate that the question is moot. He is prepared to be an idiot, which is really all that matters.
Everyone keeps crediting Cunnliffe with intelligence, but he's being populist, etc.

I don't think so.

Look at the link I posted on Paul's anti-dismal blog to an online debate I had with Cunnliffe years ago, at the stage when he'd become a born-again Keynesian devotee - which had not changed at all.

I just think he's a bit of a thickie, unfortunately, which would also ring true as it's the MO of most politicians.

By the way, typo correction: in my Apple post above I was supposed to say:

Apple is now the most valuable company ...

Not, Apple is not ...

It's that 't' v 'w' thing on the keyboard.
David Cuntliffe's face looks like a wall plug.
//Apple is now one of the most valuable companies in the world by market capitalisation: even without that it would be harder to name any other company that has been more innovative over its lifetime.// I name Qualcomm. Apple took what Qualcomm invented and did a great job of turning it into user tools. That's the great thing Steve Jobs always did from when he first peered over the shoulders of Wozniak and the other Geeks in the beginning when the Geeks had little idea about what makes regular humans tick and how to provide them computer technology. Steve had the good sense to use what other people invented, shape it with added attributes making it.

Qualcomm [Rich Kerr and co] developed the pdQ way back in the late 1990s, but they failed to get the handset division humming so sold it. Kyocera developed the pdQ further http://www.kyocera-wireless.com/pdq-smartphone/ But they too, and Nokia and everyone else, failed to put it all together how Apple did.

Qualcomm has invented in mobile Cyberspace the biggest thing not just since the industrial revolution, but including everything since the beginning of the industrial revolution, and since the invention of fire, flint and the wheel, and we should throw in everything since the invention of DNA which set off the whole biological realm leading to consciousness and intelligence.

It's bigger even than that. This is nothing less than extra-somatic sentience. We need to get theological and teleological here. Humans are just the launching pad for extra-somatic sentience, like chimps were the launching pad for humans. We no longer pay much attention to our chimpoid antecedents. Some people even claim we are descended directly from some metaphysical deity so reluctant are they to consider their prehensile fingers and hairy arms.

New Zealand is not in the game. We are like the backwoods of Rwanda's gorilla grounds, though the behaviour is not so civil as the gorillas, probably due to social disaffection through welfare and anonymity.
"Well, that’s me and Paul told then."

Yes, just how did we get it SOOOOO wrong?!....

Well maybe we didn't.
Thanks for the link, Peter. Much appreciated.

It is interesting to note how excited the Left are by Cunliffe's speech. I suppose, to be fair, if a leader of a major platform used rhetoric as far to the economic right as Cunliffe's speech was to the Left I too would prick up my ears. I think I would still be bothered by the failure to deliver on any sort of plan, though.
Err, major party. Blast.
@NZ Classical Liberal: I would think they should be bothered too by the failure to deliver on any sort of plan.

But for the last three years I've been incredulous that Cunliffe has gone around the country decrying Bill English's lack of a plan, without every being asked to provide one himself.

Frankly, I'm glad he hasn't provided one, because we know already something of what it would look like.
Quote of the Day: On political ‘donations’
I really love that quote.

(I did get to use it in one of my earlier OpEds, "The Best Congress Money Can Buy?"

http://www.realclearmarkets.com/articles/2012/04/16/the_best_congress_money_can_buy__99617.html )
“Whatever Julia says…”
I can't believe it's real. I don't know whether to laugh or to cry.
These are our representatives folks. This happens all the time in all gvts. This time the guy just happened to admit it. Because it's cool now to be a sheep. Cheers!